167.85 -0.35 (-0.21%)
After hours: 7:58PM EDT
|Bid||167.41 x 900|
|Ask||167.82 x 1000|
|Day's Range||166.44 - 170.48|
|52 Week Range||129.77 - 206.00|
|Beta (3Y Monthly)||1.85|
|PE Ratio (TTM)||48.11|
|Earnings Date||Aug 21, 2019 - Aug 26, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||217.23|
Slack’s direct listing landed in the ranks of some of the top-performing public debuts on record, by at least one measure.
Alibaba (BABA) has expanded the role of its CFO, Maggie Wu, in a change that seems to speak volumes. Wu, who's been Alibaba’s finance chief since 2013, will take on an additional role as the head of the company’s strategic investment unit.
Alibaba (BABA) has proposed a stock split that would make its shares cheaper for small investors and generally increase the liquidity in its stock. The company wants to carry out an eight-for-one stock split, which will result in its outstanding shares increasing eight times.
On Tuesday, Alibaba (BABA) announced CFO Maggie Wu would become head of its strategic investment unit, replacing EVC Joe Tsai. This is big news, as the e-commerce giant is investing heavily in other companies, including multiple $100+ million investments in late May, according to Crunchbase. Alibaba also announced it would merge DingTalk with its cloud business and make Freshippo (supermarkets) a standalone entity.In conjunction with the news, analyst Scott Devitt of Stifel reiterated his Buy rating on Alibaba stock with $220 price target, which implies over 30% upside from where the stock is currently trading.As always, we like to give credit where credit is due. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Devitt has a yearly average return of 22% and a 70% success rate. Devitt is ranked 39 out of 5,201 analysts.While Devitt sees Wu’s emergence as investment chief as a natural progression in the company’s leadership, it is the company’s other moves that are moving the stock. For one, DingTalk is China’s largest business collaboration app, and it will be merged with its cloud division. This could help cross-sell the platform, as companies not already on the cloud may now find an easier shift, with the same concept applying for those already on the cloud but not using DingTalk.In Devitt’s eyes, an important piece of news coming from Tuesday was Alibaba’s stock split. The company proposed a one-to-eight stock split, which would increase the flexibility in the company’s capital raising activities, including the issuance of new shares. Devitt views the stock split proposal as a step towards a reported Hong Kong listing, with the company filing confidential paperwork last week to raise as much as $20B.Alibaba continues to grow at a rapid pace. Last quarter, the company reported core e-commerce revenue had increased 51%, beating analyst estimates by 5%. In a similar fashion to Amazon Web Services’ rapid growth, Alibaba’s cloud division continues to rapidly expand, growing 76% over the last year. Though still not the same size as Amazon, Alibaba, too, continues to innovate and play a role in customers’ lives beyond just on the computer. Devitt says the company is refocusing its innovation initiatives unit to integrate more content offerings, including literature and music. Alibaba’s smart speaker, named Tmall Genie, is a large focus for the company, mirroring Amazon’s focus on its Alexa voice assistant.All in all, though tensions between the US and China are playing a role in how some are viewing Alibaba’s stock, most see this as a bump in the road. TipRanks analysis of 16 analyst ratings agrees with this, showing a consensus Strong Buy, with all 16 analysts recommending Buy. The average price target among these analysts stand at $216.33, suggesting the stock can rise as much as 32%.Read more: Trade War? Top Analyst Says Alibaba (BABA) Stock Still a Buy More recent articles from Smarter Analyst: * Qualcomm (QCOM) Faces Challenges, But the Stock Remains a 'Buy' * Aurora Cannabis (ACB): Investors Seem to Be Missing the Latin American Opportunity * Canopy Growth (CGC): The Emperor Isn’t Wearing Any Clothes * Should Investors Buy Facebook (FB) Stock After Its Cryptocurrency Launch? Top Analyst Weighs In
It's been almost a year since JD.com (NASDAQ:JD) CEO and founder Richard Liu was arrested on suspicion of rape. Since then, JD stock has lost about 10% of its value. Of course, it could have been much worse. Source: Daniel Cukier via FlickrInvestorPlace - Stock Market News, Stock Advice & Trading TipsLiu was not convicted , and even though the university student who made the allegations is suing JD.com's CEO for undisclosed damages, investors seem to have forgiven the e-commerce company. JD stock is up 35% year-to-date through June 18, recovering most of the losses from the fall and early winter. One thing that has cropped up in recent months that could affect JD.com though is the departure of several key executives. In May, Lan Ye, a key driver of the company's growth, stepped down. In June, chief technology officer Zhang Chen, who was responsible for the company's unmanned logistics operations among other projects, left the company. Also going is general counsel Lu Yong. * 7 Top-Rated Biotech Stocks to Invest In Today Not only are top-level executives leaving, but so, too, are mid-level managers, a sign that Liu's management style might be rubbing employees the wrong way. Should JD stock investors be worried about the exodus? You betcha, but for other reasons. Talent Takes FlightIt's easy to point to JD.com's chief executive as the reason for the culture problem at the company. However, a more significant concern might be that the real reason people are leaving is that JD.com is losing the e-commerce battle to Alibaba (NYSE:BABA), Pinduoduo (NASDAQ:PDD) and all the other smaller e-commerce companies that do battle in China. "Talented workers are starting to quit because they are worried about the outlook for the company," the Nikkei Asian Review reported, quoting an anonymous employee. My InvestorPlace colleague Dana Blankenhorn recently discussed the growth issues facing JD.com. "Serving 60-something moms and dads in rural villages is unique but selling refrigerators to their kids in Shanghai is harder," he wrote on June 19. "Despite having stores as big as 500,000 square feet, that's where I place my worries because then JD.com is competing directly with Alibaba."Dana believes that a profitable JD.com is a stock worth considering given it trades at the same price-to-sales ratio as Walmart (NYSE:WMT), the largest retailer in the world. Profits are always good. In the first quarter ended March 31, JD.com generated $190.7 million in free cash flow, which is 1.1% of revenue in the quarter. By comparison, Alibaba generated $1.6 billion in free cash flow in its latest quarter ended March 31, representing 11.5% of its revenue. JD.com might be profitable in 2019, but it's got a long way to go to meet Alibaba's cash flow generation. There's No ProblemJust before CEO Liu's arrest in late August, I was still on the JD.com bandwagon. I didn't think it was in Amazon's (NASDAQ:AMZN) league, but I believed it had a good business. "I don't think JD shareholders need to worry about the company's business. Overall, it's very strong. Unless it delivers a dud of a quarterly report, the mid $30s appear to be an artificial floor," I wrote August 6. "I wouldn't be surprised if JD stock was trading over $50 by this time next summer."By Labor Day, Liu had been arrested, resulting JD stock down to the high teens by the end of the year. It has since recovered most of those losses. After the Liu revelations, guilty or not guilty, I recommended that investors stay away until the truth came out. Although that's still a matter for the civil courts, the CEO hasn't been charged with a crime. End of, as the Brits say. * Stocks to Buy for $20 or Less Another InvestorPlace colleague, Luke Lango, who owns JD stock, recently suggested that JD.com's Amazon-like growth strategy was back on track. "Revenue growth has stabilized over the past two quarters around 20%, and projects to stay at 20% next quarter too. Meanwhile, operating margins expanded 70 basis points in the fourth quarter of 2018, and 80 basis points in the first quarter of 2019," Luke wrote June 17. "Thus, the Amazon roadmap of sustained big revenue growth on top of margin expansion is once again the underlying trend at JD."If you read between the lines, the fact that employees are leaving JD.com has less to do with its business outlook and more to do with the fact people don't stay with companies nearly as long as they once did. It's time to turn the page. Bottom Line on JD StockWhile I agree with most of my colleague's sentiments about JD.com, I have less conviction that JD stock is going to run much higher in 2019. Perhaps it gets to the mid-$30s with another good earnings report. Beyond that, I'm doubtful. As for employees leaving, I wouldn't give it a second thought. Good people leave companies all the time. JD.com's no different. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Should JD.com Stock Holders Be Worried About Employee Exodus? appeared first on InvestorPlace.
China’s benchmark Shanghai Composite Index is having a good week. The index rose 2.4% on June 20 to an eight-week high. The index rose in the first half of the day and reached the day’s high.
As the potential of JD.com (NASDAQ:JD) draws interest, the company remains mired in a trade war hitting most Chinese stocks as well as a few self-inflicted problems. While this may hamper JD stock for now, the company should grow long-term as JD extends its reach both into established markets and, in some cases, markets ignored by the investment community.Source: Daniel Cukier via Flickr JD Stock and the Trade WarWithout question, the 800-pound gorilla driving JD.com remains the U.S.-China trade war.JD continues its alliance with Walmart (NYSE:WMT). Nonetheless, the trade war affects mostly its customers, who have less money to spend with more limited access to the U.S. This brought the stock price from $50 per share down to $20 last year. A recovery has taken it above $28 per share. Still, JD trades more than 40% below its all-time high.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Stocks Ready to Bounce on a Trade Deal Another factor involves the legal troubles of company founder and CEO Richard Liu. We now know he will not go to jail, but civil allegations related to the rape accusation remain an issue.Such personal matters should concern investors. The company has no clear successor or even a plan of succession. Given the scope of Liu's troubles, a succession plan would remove a source of uncertainty that weighed on JD stock last fall.His management decisions have also led to criticism. The so-called "996" schedule, 9:00 am to 9:00 pm, six days per week has attracted a lot of negative publicity. Mr. Liu also faces attacks for criticizing employees perceived as lazy or unwilling to sacrifice for the company.Still, barring a major strike, labor complaints rarely affect stocks. Also, I think management will find a way to fill the vacuum should something happen to Mr. Liu. After the trade war ends, traders will more than likely judge JD for what the company does right and how that benefits investors. Investment and JD StockWhat has benefitted investors is the investment in infrastructure. While many believe the logistics network itself will trade under a separate stock, JD's management has no plans to list this unit separately on the markets.However, logistics remains the factor that separates it from its larger rival, Alibaba (NYSE:BABA). Rather than acting as a middleman like Alibaba, JD built a logistics network comparable to that of Amazon (NASDAQ:AMZN) in the United States.This gives JD an advantage as it facilitates omnichannel retailing. With a forecasted 94.3% earnings increase this year and 50% the next, these investments have begun to pay off. Moreover, traders can buy this kind of earnings growth at a relatively low price. Currently, the stock trades at a forward price-to-earnings (PE) ratio of about 27.2.Admittedly, such a multiple would appear expensive to most stocks. Also, should profits on JD stock take a sudden dive, the company might struggle to maintain this multiple. However, considering the earnings growth, 27.2 times forward earnings looks like a bargain.Further, as I mentioned in a previous article, investors should not discount its investment in Indonesia. At a population now estimated at over 269 million, it has more people than two more recognized emerging markets, Brazil and Russia. Hence, as it gains more attention as an emerging market, the rise of Indonesia should help JD stock to rise as well.Yes, the company needs the trade war to end, and the company should address its succession issues. However, given the deep investments and its reach across the world, I see little else that can stand in the way. Concluding thoughts on JD stockJD's deep infrastructure investments at home and its reach abroad should help JD.com stock overcome its challenges long term. Admittedly the trade war and Mr. Liu's legal troubles have influenced the stock's short-term performance. Some of his management decisions have also brought criticism.However, when one can buy 50%-plus profit growth for 27 times forward earnings, it should pay off at some point. This makes JD stock a winner--as soon as it can put the trade war behind it.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Blue-Chip Stocks to Buy for a Noisy Market * 5 Strong Buy Biotech Stocks for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal Compare Brokers The post The Trade War Is the Only Thing Holding Back JD Stock appeared first on InvestorPlace.
BEIJING/HANGZHOU, China, June 20 (Reuters) - In China, the sales maxim of 'know your customer' is being taken to new lengths. One of the first firms to join an Alibaba Group Holding Ltd programme that provides years of consumer shopping history, snack food chain Bestore Co Ltd plans to link facial recognition technology with the e-commerce giant's account data by the year's end. For customers opting to have their facial data in Bestore's systems, that means shop assistants will be able to check on what food they like the moment they enter one of its stores.
BEIJING/HANGZHOU, China (Reuters) - In China, the sales maxim of 'know your customer' is being taken to new lengths. One of the first firms to join an Alibaba Group Holding Ltd programme that provides years of consumer shopping history, snack food chain Bestore Co Ltd plans to link facial recognition technology with the e-commerce giant's account data by the year's end. For customers opting to have their facial data in Bestore's systems, that means shop assistants will be able to check on what food they like the moment they enter one of its stores.
Alibaba Group’s (BABA) Taobao and Tmall shattered multiple records during this year’s “6.18 Mid-Year Shopping Festival,” sating a rising demand from consumers in less-developed cities for quality products. Innovative marketing campaigns and tools provided by Alibaba’s core platforms during the 18-day campaign helped more than 110 brands each generate gross merchandise volume in excess of RMB100 million. Popular among brands of all sizes, Taobao livestreaming helped generated GMV of more than RMB13 billion.
When it comes to the stock market, U.S. President Donald Trump's Twitter (NYSE:TWTR) account may be the crystal ball which can help investors predict what's going to happen next.Back in early May, Trump fired off a tweet in which he said that China "broke" the trade deal, and that new tariffs would be coming soon. That tweet shook markets. Stocks fell. Over the next month, trade tensions between the U.S. and China heated up. Stocks kept falling. From Trump's tweet to the end of May, the S&P 500 shed more than 6%.Now, in late June, Trump has fired off another trade-related tweet. But this one has a far more positive tone. In this tweet, Trump said that he and China President Xi Jinping are going to have an "extended meeting" next week at the G-20 Summit in Japan. That tweet surprised markets, since most investors presumed the two nations were on such disagreeable terms that a meeting at G-20 wasn't going to happen. Now, it's going to happen. That's good news for markets. The S&P 500 responded by rallying more than 1% that same day.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, a Trump tweet was the very thing which started a big meltdown in markets in May, because that tweet basically said trade talks are not going well. Now, a different Trump tweet could be the very thing which starts a melt-up in markets in late June, because this tweet basically says that a trade deal could be coming soon. * 7 Value Stocks to Buy for the Second Half With that in mind, let's take a look at six stocks that are ready to bounce in a big way in the event a trade deal does get struck between the U.S. and China sometime soon. Stocks to Buy for a Trade War Bounce: Alibaba (BABA)Source: Shutterstock If the U.S. and China strike a trade deal in the foreseeable future, one stock that will fly higher is Alibaba (NYSE:BABA).Being the juggernaut in the Chinese e-commerce landscape, Alibaba goes as the China economy goes. When China's economy is firing on all cylinders, so is Alibaba. Revenue growth is big, margins are healthy and BABA stock moves higher. On the flip side, when China's economy is slowing, Alibaba slows, too. Revenue growth decelerates, margins compress and BABA stock moves lower.China's economy was firing on all cylinders in 2017. That's why Alibaba stock went from $90 to $180. But, China's economy slowed in 2018. That's why BABA stock fell from $180 to $130. Shares rebounded to $190 in 2019 as China's economy picked up steam against the backdrop of improving trade relations. But trade relations deteriorated in May, and since then, BABA stock has dropped back to $160.It looks like trade relations are back on the "getting better" path. So long as they remain on that path, BABA stock will move higher. In the event that a trade deal is actually struck, this stock will soar to levels above $200. iRobot (IRBT)Source: Shutterstock One under-the-radar growth stock which is set to win big if the U.S. and China strike a trade deal is iRobot (NASDAQ:IRBT).iRobot manufactures and sells consumer household robotic products, with the present focus on robotic vacuums. This is a growth market. Low-level automation is the first step of the automation revolution, and iRobot is king in the low-level-automation world, creating machines which automate simple tasks that most people don't like to do (vacuuming, mowing the lawn, cleaning the pool, so on an so forth). As such, as the automation wave gains mainstream traction over the next several years, household robotic adoption will rise rapidly and iRobot's sales and profits will march higher. That growth will ultimately push IRBT stock higher, too.This secular growth narrative has hit a snag with the trade war. iRobot is a U.S. company. One of its biggest growth markets is China. As such, iRobot is at the epicenter of the U.S.-China trade war, and every tariff hike back and forth results in higher input prices for the company. In short, trade war tensions between the U.S. and China have put the secular iRobot growth narrative on hold. * 5 Stocks to Buy for $20 or Less If a deal is struck between these two countries, that holding period will end, and it will be replaced by resumption of the iRobot secular growth narrative. That resumption will put IRBT stock back on a winning path. Luckin Coffee (LK)Source: Shutterstock One growth-oriented way to play a trade war resolution is through buying shares of Luckin Coffee (NASDAQ:LK).Luckin Coffee is China's brand new, hyper-growth coffee shop chain, which is surging throughout China using a unique, small-store, digital-first model that resonates with China's millennial urban consumers. At scale, this company could one day turn into the Starbucks (NASDAQ:SBUX) of China. Starbucks has a $100 billion market cap. Luckin's market cap is at $5 billion. As such, the runway for long term growth in LK stock is quite promising.But, this is a China growth story, and if the China economy isn't doing well, the LK stock growth narrative won't be smooth. China's economy won't do well if trade tensions continue to escalate. But if a trade deal is struck, China's economy will get back to firing on all cylinders. If that happens, the Luckin stock growth narrative will fire on all cylinders, too.As such, a trade war resolution could be the exact catalyst LK stock needs to get started on a long-term winning path. Nike (NKE)Source: rodrigofranca via FlickrOne global apparel giant that stands to benefit tremendously from a trade deal is Nike (NYSE:NKE).Nike is the world's leading athletic apparel brand. As the world's leading athletic apparel brand, the company has a ton of exposure to China, trade and tariffs. Roughly 26% of Nike brand footwear and apparel is manufactured in China, and the Greater China geography accounted for 15% of Nike brand sales last year. As such, Nike has broad exposure to both U.S.-China tariffs and a trade-related China economic slowdown.Remove these issues, though, and Nike looks really good right now. The company is simultaneously benefiting from a secular rise in global athletic apparel adoption and growing share in that market using rapid product innovation and a shift to a direct-sales model. * 7 Top-Rated Biotech Stocks to Invest In Today Broadly, then, if trade war risks disappear, NKE stock should fly higher. The rest of this growth narrative is on fire right now. Remove the one headwind, and that creates runway for big gains in Nike stock. Foot Locker (FL)Source: Shutterstock Along the same lines as Nike, another athletic apparel stock that should run higher if a trade deal is struck is Foot Locker (NYSE:FL).Things look good at Foot Locker right now. After spending a few quarters below zero, comparable-sales growth is back in positive territory again, and comps were up nearly 5% last quarter. Physical stores are comping positive. Digital sales are growing at a double-digit pace. Gross margins are expanding. Profits are up.Net net, the numbers at Foot Locker are pretty good, supported by a secular rise in athletic apparel adoption and stabilization in the physical and wholesale retail markets. The only problem here is the trade war. Unfortunately, it's a big problem. Owing to the athletic footwear market's broad exposure to imports from China, Foot Locker presently finds itself at the epicenter of the trade war. The higher tariffs go, the worse things will get for Foot Locker.But, if those tariffs go away entirely, things will get way better for Foot Locker. FL stock is cheap enough right now (8 times forward earnings) that if things do get better, the stock will bounce in a big way. Intel (INTC)Source: Shutterstock One sector that has been killed by the U.S.-China trade war is the semiconductor market, and one stock in that market that could win big in the event of a trade war resolution is Intel (NASDAQ:INTC).The semiconductor space has a lot of U.S.-Asia trade exposure, with big customers and manufacturers on both sides of the Pacific Ocean. Thus, as trade tensions between the U.S. and China escalated, global semiconductor demand weakened and production costs became an issue. Consequently, semiconductor stocks dropped.Intel was one of those stocks. As one of the world's largest semiconductor companies, Intel has huge exposure to China. But a trade resolution between the U.S. and China should re-stoke demand and ease rising cost pressures. If that happens, Intel's revenue and margin growth trajectories will meaningfully improve. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 Much like FL stock, INTC stock is cheap enough today (10x forward earnings) that any positive news on the trade front should put significant upward pressure on shares.As of this writing, Luke Lango was long BABA, IRBT, LK, NKE, FL, and INTC. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post 6 Stocks Ready to Bounce on a Trade Deal appeared first on InvestorPlace.
In May, Alibaba (NYSE:BABA) reported what appeared to be blowout earnings. The report topped expectations by a mile, but it did nothing for Alibaba stock. BABA stock price barely advanced following the earnings release, and it is still down 9% over the last three months.Source: Shutterstock What's going on? Surely, some of the struggles of Alibaba stock are related to the trade war. The longer it drags on, the more the Chinese economy will continue to slump. But Alibaba faces some unique issues of its own, namely that people are increasingly questioning the company's accounting. BABA is now trying to sell more stock to the public, while its short interest has ballooned to 9% of its available shares. That's a massive number for a company of its size. * 7 Value Stocks to Buy for the Second Half The shorts have been encouraged by the internet posts of a person who claims to be a financial professional These posts, made under the name Deep Throat IPO, contain allegations about Alibaba's accounting, leading many investors to conclude that BABA can't be trusted.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Is Alibaba Actually Earning Much Money?For last quarter, Alibaba reported a huge jump in its net income. In fact, on both a GAAP and non-GAAP basis, Alibaba crushed analysts' average expectation. It reported non-GAAP earnings per share for the quarter of $1.28 against the consensus outlook of just 95 cents. Meanwhile, its GAAP EPS of $1.47 absolutely annihilated analyst estimates of just 51 cents per share.What explains the huge disparity? Most of Alibaba's reported profits for the quarter came from marking up the value of its investments rather than from its operating businesses. For the quarter, its reported net income soared 252% year-over-year to $3.5 billion. However, its actual profits from its operating business went down 5% to just $1.3 billion, though it would have posted a modest gain if it hadn't had to pay a lawsuit settlement.Still, its worth asking what's going on. Alibaba reports phenomenal revenue growth rates, yet its core retail profits are essentially flat. And its much-touted cloud and digital media divisions continue to lose money. Take out the increased profits from its investments - which doesn't mean much unless BABA can turn that paper into actual cash in the future - and BABA stock is absurdly expensive compared to its actual cash earnings. Is Alibaba Really Bigger Than Wal-Mart And Amazon?There's long been a great deal of dispute over whether Alibaba and other Chinese retailers inflate their GMVs (Gross Merchandise Volume). The SEC probed Alibaba's sales reporting a few years ago, and investors have made allegations about other Chinese firms like PinDuoDuo (NASDAQ:PDD) inflating their revenue.In the case of Alibaba, the numbers get more and more questionable as time goes on. Alibaba claims its GMV has soared more than tenfold from 2012 to today, with that figure jumping from $80 billion then to more than $800 billion now. For comparison sake, that's more than Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) handle annually combined! You might say that Alibaba's business could be that big because China is so huge. Remember, though, that Walmart is a leading retailer in 25 countries and Amazon has a huge overseas businesses as well. It strains credibility to believe that Alibaba is larger than Walmart and Amazon put together.There's also the matter of how much each company generates per employee. That is a common check for fraud, and Alibaba comes out looking rather peculiar. Deep Throat IPO puts it well:The other ratio I find fascinating is GMV per employee. Walmart's GMV per employee is $284,000. Amazon's is $428,000. Alibaba's is $8,366,000 per employee. They are truly masters at doing more with less.Is it realistic for Alibaba's employees to be 20 times more efficient than Amazon's? If you own BABA stock, you better hope so. Is Ant Financial Worth Anything Close To Investors' Expectations?Supposedly, Alibaba's Ant Financial, a digital payments facilitator, is worth $150 billion, which would make up around a third of the overall $400 billion market cap of Alibaba stock. In fact, Ant Financial was valued at $150 billion when it raised money last year. However, there is reason to be skeptical about that valuation. Specifically, it scrapped plans for an IPO last year, and it was supposed to launch an IPO this year, but the offering appears to be delayed again.Meanwhile, Ant Financial, which is supposed to be such a dominant global payments player, doesn't appear to be doing so well. Last year, Alibaba, which has a profit-sharing agreement with Ant Financial, did not receive any distributions from Ant because Ant didn't make any profits. This past quarter, however, Alibaba earned $77 million from Ant Financial. $77 million seems like a pittance, given Ant Financial's supposed $150 billion valuation. Perfectly normal. What Happens If the Chinese Financial System Freezes Up?For all of Alibaba's purported profits, the company keeps needing more money. There's probably good reason for that, since most of its "profits" don;t come in the form of cash while it is investing money in a nearly endless list of start-ups both in China and overseas. As mentioned above, Ant Financial did a big fundraising push last year, and now Alibaba is trying to unload a cool $20 billion of its stock in a secondary offering in Hong Kong.All this brings up the trade war and the weakening yuan. The yuan is near seven per dollar, its lowest level in years, and pressure appears to be growing for a major devaluation of the currency. What happens to Alibaba's ability to raise more money to keep its investing carousel spinning if China's capital markets freeze up? Also, the valuations of all these nascent businesses Alibaba has invested in will implode if the IPO window shuts down for these sorts of firms. The Verdict on BABA StockIt's been interesting watching Alibaba and JD.com (NASDAQ:JD) over the past year or two. As the Chinese economy has slowed, many of China's retailers have seen their growth rates sharply drop. JD, for example, has gone from 50% annual growth to just 20% recently. Alibaba's growth rate, however, appears totally unaffected by the deepening Chinese malaise. It keeps pumping out 50% annual revenue growth, rain or shine. Does Alibaba have a special sauce that keeps it immune to economic weakness?So far, BABA stock has been a winner. But how long can it keep up? Alibaba already claims to be larger than Amazon and Walmart put together. If the numbers are real, surely BABA will run out of people to sell to fairly soon; there are, after all, limits to a company's growth once it dominates a market. And if the numbers aren't real…At the time of this writing, Ian Bezek owned JD.com stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post 4 Burning Questions for the Owners of Alibaba Stock appeared first on InvestorPlace.
Baillie Gifford partner Richard Sneller also shares insights on Russia, Brazil, Argentina and rising demand for oil.
Alibaba (NYSE:BABA) reportedly is getting a Hong Kong listing. Multiple reports suggest the company is planning to sell $20 billion worth of Alibaba stock on the Hong Kong Stock Exchange. A key question, with the BABA stock price down about 18% from early May highs, is "Why now?".Source: Shutterstock As with so much when it comes to Alibaba stock, bulls and bears likely will answer the question very differently. Bulls see the company raising capital for its myriad initiatives -- and potentially raising the profile of BABA stock. Bears wonder why the company needs the cash and why it needs to do such a deal now.BABA has long been a battleground stock. The Hong Kong listing likely will only harden both sides.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Case for the Alibaba Stock OfferingThere are two broad benefits to the cross-listing. One, Alibaba's plan to list on the Hong Kong exchange could -- and maybe should -- drive the BABA stock price higher.Hong Kong-listed shares can be owned directly by Chinese investors. Those investors might see Alibaba more favorably than their foreign counterparts. And if Alibaba stock rises on the Hong Kong exchange, its New York listing might do the same, as arbitrageurs buy cheaper New York-listed shares. * 7 Top-Rated Biotech Stocks to Invest In Today That said, those arbitrageurs also would sell the Hong Kong-listed shares, potentially mitigating some of the effects of increased demand. And the two shares would not be the same: BABA stock does not offer direct ownership of the company. Rather, 'shareholders' own a stake in a VIE (variable interest entity) in the Cayman Islands.That VIE has a contractual right to Alibaba profits -- but that's not the same thing as actually owning shares of Alibaba itself. As such, it would seem almost certain that Alibaba shares in New York will trade at a consistent, if modest, discount to the Hong Kong-listed shares to account for the VIE-related risk.Still, details aside, a second listing could increase demand for Alibaba stock, particularly among China's retail investors. Smaller investors control 35% of the Chinese market, against an 8% share in the U.S. And the pending Alibaba stock split likely allows those Chinese retail investors to afford smaller positions. There is a case that BABA stock should get a bump from the two listings.The second goal, apparently, is to raise capital. Alibaba's New York IPO was the largest in history, raising $25 billion. Alibaba reportedly will bring in another $20 billion this time around. Those funds can be used for more acquisitions; building out the cloud business; or further investing behind the business.That in turn would seem to signal a longer-term rise in Alibaba stock, assuming the funds are invested well. The Case Against the OfferingSo BABA bulls no doubt see the new listing as good news. Indeed, the BABA stock price has risen modestly of late, though a stronger broad market likely plays a role as well.But for Alibaba skeptics, the offering seems curious. That's particularly true for investors who question the company's accounting, The first question is why, exactly, Alibaba needs another $20 billion. The company closed fiscal 2019 (ending March 31) with $28.3 billion in cash on its balance sheet. Alibaba owns another $24 billion or so in investment securities (not including its investments in private companies). That $44 billion war chest sits against total debt of less than $9 billion.To be sure, Alibaba does have places to spend its cash. The company's operations beyond core commerce last year -- cloud computing, digital media and entertainment, and its "innovation initiatives" -- all posted losses last year as Alibaba invested in future growth. In cloud, Alibaba is trying to replicate the success of Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). Rival JD.com (NASDAQ:JD) is spending heavily on its supply chain.But operating losses for those segments totaled a little over $5 billion. Even with those losses, free cash flow was somewhere in the range of $15 billion, even including payments for copyrights and other intangible assets. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 For those who doubt Alibaba, the offering (which reportedly will be of new shares) makes little sense. Alibaba, if its financials are accurate, has more than enough cash to fund even aggressive investments in its new initiatives. Unless there's a big acquisition planned, Alibaba is diluting its shareholders for money it doesn't seem to need. Is the BABA Stock Price Too Low?Alibaba stock is down 23% from July 2018 highs. Yet it will likely price those shares at a discount to the current U.S.-listed price (as is usually the case with these offerings). That in turn means Alibaba shareholders will see their ownership diluted at a price well below their view of the stock's intrinsic value. (Presumably, all Alibaba shareholders, outside of passive managers, believe the stock is undervalued at the moment.)It's possible the dilution will be worth it. Perhaps Alibaba has a big deal in mind. It needs to compete against JD.com and Tencent Holdings (OTCMKTS:TCEHY) and, perhaps, the more cash the better. A wider reach for the stock -- and direct ownership, as opposed to the U.S.-based VIE structure -- can help as well.But the capital raise only adds to the doubts surrounding BABA stock as well. And while short interest here is likely somewhat overstated (there are no doubt arbitrage traders who are long Altaba (NASDAQ:AABA) and short BABA), short sellers likely will see the offering as confirming their thesis, not disproving it.In short, the beauty of the listing, like Alibaba stock, is in the eye of the beholder. Bulls see more shareholders, more cash, and a higher BABA stock price. Bears see another questionable move … and maybe even another red flag. Time will tell which side has it right.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post With BABA Stock Price Down, Why Is Alibaba Selling Shares In Hong Kong? appeared first on InvestorPlace.
The fight between China’s ecommerce giants has stalled. As the market matures, there is little ammunition left to bridge the gap between leader Alibaba and runner-up JD.com. Alibaba has triple the market share and higher margins.
Alibaba may soon relive the glory days associated with its record-beating initial public offering in 2014. Now the biggest stock in Asia-Pacific, with a market value of $412bn, Alibaba has had to be creative to maintain its growth. China’s ecommerce giant does not necessarily need more funds.
Alibaba Business School today hosted its first-ever Asian reunion for eFounders Fellowship and Alibaba Netpreneur Training Programs Graduates in Kuala Lumpur, Malaysia. Over 200 entrepreneurs and participants from Southeast Asia participated in this event to learn and network with up-and-coming entrepreneurs around the region and celebrate their success stories.
For most of the past year, investor concerns surrounding JD.com (NASDAQ:JD) have mainly been about CEO Richard Liu, who was arrested in early September on suspicion of rape. JD stock fell 6% on the first day of trading following the news, further extending a drop that had begun in early June 2018.Source: Daniel Cukier via FlickrLiu was in Minneapolis for a residency as part of a doctorate program in business administration for "top-level executives" working full-time in China.While journalists wrote breathlessly about the shares plunging after Liu's arrest, the real question -- for investors -- is why JD stock began falling about a year ago in the first place and where it may go from here.InvestorPlace - Stock Market News, Stock Advice & Trading Tips JD.com is InfrastructureLike Alibaba Group Holding (NASDAQ:BABA), JD.com stock is a play on Chinese e-commerce infrastructure. But unlike Alibaba, which focuses on clouds and retailing, JD.Com focuses on distribution. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 JD.com is able to deliver orders profitably to remote villages, and is a leader in automated delivery in cities. The company delivers about 150,000 orders daily from 500 distribution bases and it has robots delivering fresh goods by land and air. While U.S. companies like Amazon (NASDAQ:AMZN) struggle to get orders delivered in 24 hours, JD.com is getting some packages to their end point in 30 minutes.JD.com has a market cap of $33 billion and expects quarterly revenue of $21.85 billion, with profits of 5 cents a share, when it next announces earnings August 9. During the March quarter, when it was expected to earn 12 cents per share, it surprised investors with earnings of 74 cents. The delivery infrastructure has value in its own right, and there have been reports it might list the unit separately. China Growth ConcernsJD.com had revenue of $18.6 billion in 2014. That more than tripled, to nearly $70 billion, by 2018.My InvestorPlace colleague James Brumley wrote recently that investors are worried about JD tripling the number of its rural storefronts in China to 15,000.Serving 60-something moms and dads in rural villages is unique but selling refrigerators to their kids in Shanghai is harder. Despite having stores as big as 500,000 square feet, that's where I place my worries because then JD.com is competing directly with Alibaba. Unique NichesUnique niches are hard to come by, but JD.com keeps finding them. One of the more interesting is online sales of luxury goods, where it has a tie-up with Farfetch (NYSE:FTCH), a global seller of luxury brands that went public last September. * 7 Top-Rated Biotech Stocks to Invest In Today Farfetch China acquired Toplife, JD's luxury portal, in 2017. JD.com bought a $397 million stake in Farfetch and Liu sits on the Farfetch board. Farfetch opened a China portal on JD.com earlier this month, giving JD stock a much-needed boost.Which leads to the other bearish call on JD.com: the slowing growth of China itself. The trade wars have Morningstar cutting its growth estimates for the world's second-biggest economy in half, to 3.25%. That's still higher than U.S. growth. Bottom Line on JD.com StockThe trade war has made Chinese stocks volatile, especially in the tech sector. But JD.com stock is now selling at a Walmart (NASDAQ:WMT) price, when its $70 billion in sales are matched with its $33 billion valuation. (Walmart is worth $311 billion on $515 billion in sales.)JD.com's growth means it hasn't yet made a profit for a full year, but if it hits the mark in August, and continues to make money through 2019, while growing that unique infrastructure, it's got to be worth money to a speculative investor.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Growth Is The Only Question That Should Worry JD.com Stock Investors appeared first on InvestorPlace.
(Bloomberg) -- SoftBank Group Corp. founder Masayoshi Son is trying harder than ever to convince investors of the potential for his many technology investments.At a general shareholders’ meeting in Tokyo on Wednesday, Son shared some predictions that were eye-popping even by the standards of the outspoken Japanese billionaire. The value of SoftBank’s investment portfolio could grow 33-fold to 200 trillion yen ($1.8 trillion) in 20 years, he said. That’s an annual growth rate of 19%. The numbers were so outlandish that Son had to add a caveat.“Let me be clear that this is not a business plan,” he said. “It’s a tall tale.”The gathering was SoftBank’s 39th shareholders meeting, with about 2,000 investors present. Son’s remarks drew laughs and even feigned outrage from directors. Fast Retailing Co. CEO Tadashi Yanai, who sits on SoftBank’s board and is Japan’s richest man, urged shareholders to look out for Son “or he will go out of control.”The billionaire’s projections include investments by the Vision Fund. But even bullish analysts have much more modest projections for that portfolio. Chris Lane of Sanford C. Bernstein recently estimated the net present value of the current and future funds at $50 billion to $85 billion.Son then reminded shareholders how 15 years ago at the very same auditorium he presented another seemingly improbable target -- SoftBank with 1 to 2 trillion yen in profit. At the time, the company booked over 100 billion yen in losses. Annual net income has exceeded 1 trillion yen for the past three years.Over that period of time, Son has expanded into wireless operations with the acquisition of Vodafone Group Plc’s Japan unit, acquired Sprint Corp. in the U.S. and launched the $100 billion Vision Fund to transform SoftBank into a technology investment juggernaut. Still, the company trades at a deep discount to the worth of its holdings. The total value of the conglomerate’s publicly traded shareholdings is around 21 trillion yen, while SoftBank’s market cap is roughly 10.7 trillion yen. By the company’s own estimation, there is a discount of about 50%.Son’s message to investors is that when it comes to technology, he is ahead of the curve. He was early to recognize the value of e-commerce and invest in Alibaba Group Holding Ltd. SoftBank was also first to introduce Apple Inc.’s iPhone in Japan. Now Son believes the world is on the verge of another technological shift, driven by artificial intelligence that will transform every industry. He argues that the company’s portfolio of unicorns from Uber Technologies Inc. to WeWork Cos. positions SoftBank to reap the most benefits from that disruption.“I wish I had the money to make tons of investments at the start of the internet revolution. I could see it coming,” Son said. “We started the Vision Fund at the very beginning of the AI revolution.”At least a few of the investors present took him at his word.“Son may talk big, but just look at what he has actually accomplished,” said Yasuhiro Suzuki, a SoftBank shareholder of about 20 years. “I have been to many of these meetings, but today Son seemed especially in high spirits.”Key Insights:The Vision Fund is nearing the end of its investment cycle and SoftBank is in the process of raising a second one of equal size, Son said. The two funds will be successive. SoftBank is in talks with limited partners in the first fund to renew their investments.The company is increasing staff at the fund to 1,000 people, from 415 now.To contact the reporters on this story: Pavel Alpeyev in Tokyo at firstname.lastname@example.org;Takahiko Hyuga in Tokyo at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Alibaba Group Holding Ltd (NYSE: BABA) shares have held up relatively well up to this point in 2019 considering the beating other Chinese stocks have taken as the trade war between the U.S. and China has ramped up. On Tuesday morning, Benzinga Pro subscribers received a series of options alerts related to Alibaba. At 9:39 a.m., a trader bought 576 put options with a $177.50 strike price expiring on July 5 at the ask price of $14.35.
The National Basketball Association has moved past Major League Baseball to represent the second most popular sport in the United States. How does the NBA make money?
The China internet giant has rallied ahead of the broad market this year, rising more than 21% in 2019. Citigroup says the momentum can keep growing.
Wu will take over responsibility from Executive Vice-Chairman Joe Tsai, who was demoted to a supportive role in the strategic investments unit, according to Reuters. The change comes at a time when Alibaba is investing in new business lines like cloud computing at a time when e-commerce growth is slowing. Alibaba's management shuffle represents the most significant changes at the senior level since co-founder Jack Ma announced his retirement, Alibaba said.
U.S. Senator Chris Van Hollen joins Yahoo Finance to discuss the impact of Trump's trade war saying it's "certainly hurting the U.S. economy." He also weighs in on its impact of Chinese stocks and rising tensions with Iran, saying we "need all the facts" on the tanker attacks.